An important question in development concerns the mechanisms controlling cell numbers as they determine the availability of differentiated cells in the adult, of stem cells capable of regenerating damaged tissues, and of cells potentially becoming malignant. An ideal system to address the question of cell number determination is provided by neural crest-derived melanin-bearing pigment cells (melanocytes) which are not only important for coloration of the integument but also for seeing and, at least in mammals, for hearing. A crucial factor determining the numbers of melanocytes is the transcriptional regulator MITF which comes in at least two alternative splice variants. One concerns exon 6A, encoding 6 residues that lie upstream of the DNA-binding domain and are adjacent to post-translationally modified lysines, and another concerns exon 2B, encoding 56 residues including a post-translationally modified serine. Genetic tests in mice indicate that these two splicing events are independent of each other but functionally relevant. The selective lack of exon 6A leads to a relative paucity of melanocytes, and the selective reduction of exon 2B to an increase in the number of melanocytes. In in vitro experiments, we have found that the splicing of exon 2B is regulated positively and negatively by serine/arginine-rich proteins that bind exonic splicing enhancers, and we are in the process of fine-mapping the RNA binding sites for these proteins. We have also found that MITF protein either containing or lacking exon 2B has differential effects on cell proliferation at the level of S-phase. Further, we have found that the lack of exon 6A, which based on previous results also regulates cell proliferation, leads to a reduction in melanocyte precursors early in development and that a second site mutation in the gene corrects this early precursor reduction to near wild type levels. The results suggest that alternative splicing of MITF is an important parameter of cell number determination during development and may also provide insights into the abnormal cell proliferation found in malignancies.